Missing markets and charging immigrants

Gary Becker wants to charge immigrants $50,000 to enter the United States. He thinks that letting a large number of immigrants come at that price would be preferable to the current quota, which effectively sets the price to infinity for some immigrants.

The crazy thing is that the international labor market is so distorted that migrant laborers are estimated to gain something like $10,000 – $17,000 annually (Lant Pritchett, Let Their People Come), so many might be willing to pay $50,000. But for this proposal to have any credibility, we’d need loans so that immigrants could purchase this massive increase in lifetime earnings. And what would impoverished immigrants pledge as collateral on the loan? This missing market seems crucial, and Becker’s offhand comments (“along the lines of student loans. There would be some role of government because there would have to be some enforcement provision”) aren’t very convincing.

Oddly, the only reason to offer such a proposal is to try to buy off public opposition to increased immigration, but Becker admits that it is a political non-starter.

HT: Emmanuel.

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